Did you know the rising cost of building materials (like lumber) can have an impact on your home value?In turn, this also affects your homeowners insurance. Why?
Let's start here: In the pandemic’s infancy, factories producing lumber, steel, and cement had to scale back or shut down, thus cutting supply.
Building Material Supply
Meanwhile, the housing market was going wild. Mortgage rates were at an all time low and more people left cities to settle in the suburbs.
Building Material Demand
So with demand far outweighing supply, prices have risen. Between April 2020 and April 2021, lumber alone rose 85.7%*
*Associated General Contractors of America
The Affect on Homeowners Insurance
Think about this: if something were to happen to your home, what would it cost to rebuild it?
Because of the rising prices of building materials, it will cost more today to rebuild your home if it's destroyed.
The dwelling coverage part of your homeowners policy will cover the cost of your home's structure and permanently installed fixtures (think wiring and plumbing).
Keep in mind that additions and renovations will change the cost of rebuilding as well. We recommend notifying your insurance agent when making home improvements.
We also recommend checking in on your homeowners insurance each year so you can rest easy knowing you're protected.
About 60% of homes are undervalued & potentially underinsured by 17%*